Details on the future reform of solidarity tax on wealth (ISF)

The newspaper Les Echos published this morning an article about the low yield expected from the new tax on real estate assets (IFI) which will replace the solidarity tax on wealth (ISF) from 1st January 2018.

According to Les Echos, the change from ISF to IFI will lead to a significant loss of tax income for the state, since the yearly yield for this tax, refocused on real estate portfolio, is estimated to be less than 1 billion euros whereas ISF, currently in force, brings in between 4 and 5 billion euros a year.

Figures which will add to the Parliamentary debate on the approval of the 2018 budget, which should be lively. The reason for this low yield, according to the paper, is due to the low proportion of real estate assets in the portfolios of the wealthiest households.

Furthermore, Les Echos reveal experts’ worries about the technical complexity linked to the precise framework of the new tax (fate of shares in listed real estate investment companies, shares in funds partially invested in real estate, liquidities and investment values held in real estate companies) and about the Finance Ministry’s efforts to dissuade circumvention strategies (the Bill contains no fewer than six anti-abuse measures !).

To find out more, we must wait for the official presentation of the 2018 draft Finance bill, on 27th September.

Source : les Echos Friday 22nd and Saturday 24th September, page 2